Hi,
One of my friends has been terminated from her previous organization due to data leakage. She was charged with sending some customer data to her personal email address, and a show cause notice was served on her last working day after office hours. She tried to defend herself, but a month later, after joining a new organization, a termination letter was issued to her citing a breach of the company's code of conduct. When she approached the organization for her gratuity dues after 9 years of service, she was denied, citing ineligibility on the grounds of governance termination. Is there any clause in the gratuity act where, if there is no financial misutilization, gratuity can be forfeited?
From India, Gurgaon
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One of my friends has been terminated from her previous organization due to data leakage. She was charged with sending some customer data to her personal email address, and a show cause notice was served on her last working day after office hours. She tried to defend herself, but a month later, after joining a new organization, a termination letter was issued to her citing a breach of the company's code of conduct. When she approached the organization for her gratuity dues after 9 years of service, she was denied, citing ineligibility on the grounds of governance termination. Is there any clause in the gratuity act where, if there is no financial misutilization, gratuity can be forfeited?
From India, Gurgaon
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Dear Eronie7,
You have asked for advice from the seniors; nevertheless, we need a little more information. Did your friend work in India? We need to know as Indian labour laws are applicable to companies that have offices in India.
Secondly, the show cause notice was issued to your friend on the last working day, and that too after working hours. In that case, did the company send her communication stating that her letter of resignation is held in abeyance and she has been suspended pending the inquiry?
An employee forfeits the gratuity claim if he/she is terminated. However, termination is a punishment of the highest order. A domestic inquiry should precede before awarding punishment of any kind. However, did her previous company conduct the domestic inquiry on account of a breach of security? Any termination should be preceded by the inquiry. This is what the principles of natural justice say.
Thirdly, this is beyond the labor laws. What was the performance of your friend or how were her relations with her seniors? Were her seniors looking for opportunities to show her the door, and did the transmission of some information to her personal e-mail ID come in handy for them?
There are a few questions associated with your post. Please clarify.
Thanks,
Dinesh Divekar
From India, Bangalore
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8227You have asked for advice from the seniors; nevertheless, we need a little more information. Did your friend work in India? We need to know as Indian labour laws are applicable to companies that have offices in India.
Secondly, the show cause notice was issued to your friend on the last working day, and that too after working hours. In that case, did the company send her communication stating that her letter of resignation is held in abeyance and she has been suspended pending the inquiry?
An employee forfeits the gratuity claim if he/she is terminated. However, termination is a punishment of the highest order. A domestic inquiry should precede before awarding punishment of any kind. However, did her previous company conduct the domestic inquiry on account of a breach of security? Any termination should be preceded by the inquiry. This is what the principles of natural justice say.
Thirdly, this is beyond the labor laws. What was the performance of your friend or how were her relations with her seniors? Were her seniors looking for opportunities to show her the door, and did the transmission of some information to her personal e-mail ID come in handy for them?
There are a few questions associated with your post. Please clarify.
Thanks,
Dinesh Divekar
From India, Bangalore
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""Employee forfeits the gratuity claim if he/she is terminated.""
Presuming that your friend was working in India the rule for withholding gratuity is as follows:
The gratuity payable to an employee shall be wholly forfeited:
(i) If the services of such employees have been terminated for his riotous or disorderly conduct or any other act or violence on his part; or
(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude provided that such• offence is committed by him in the course of his employment.
In order to forfeit gratuity of an employee, there must be termination order containing the charges as established to the effect that the employee was guilty of any of the aforesaid misconducts. In one case, it has been held that in the absence of termination order containing any of the above allegations, the gratuity of an employee cannot be forfeited.
Reference :
Bombay Gas Pu blic Company Ltd. vs. Shri Papa Akbar & others, 1990 (1) CLR 102 (Bom.HC); 1990 LLR 118.
Please check what the termination order quotes about reason for termination?
Secondly did company conduct a domestic enquiry where in she had access to information for defending herself.
As learned member above has already written mor info is required for correct advice.
From India, Pune
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Presuming that your friend was working in India the rule for withholding gratuity is as follows:
The gratuity payable to an employee shall be wholly forfeited:
(i) If the services of such employees have been terminated for his riotous or disorderly conduct or any other act or violence on his part; or
(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude provided that such• offence is committed by him in the course of his employment.
In order to forfeit gratuity of an employee, there must be termination order containing the charges as established to the effect that the employee was guilty of any of the aforesaid misconducts. In one case, it has been held that in the absence of termination order containing any of the above allegations, the gratuity of an employee cannot be forfeited.
Reference :
Bombay Gas Pu blic Company Ltd. vs. Shri Papa Akbar & others, 1990 (1) CLR 102 (Bom.HC); 1990 LLR 118.
Please check what the termination order quotes about reason for termination?
Secondly did company conduct a domestic enquiry where in she had access to information for defending herself.
As learned member above has already written mor info is required for correct advice.
From India, Pune
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Mr. Dinesh Divekar, thank you for your reply. My friend's show cause notice was issued after business hours on Last Working Day (LWD), mentioning that her resignation acceptance was kept on hold. There were a couple of email exchanges for clarification, wherein my friend had denied sending any confidential data to her personal email id except for her salary slips. Yes, this is in India only. After her final response to the show cause notice, the management conducted an internal inquiry of their own and suddenly informed her of termination without any compensation. The company had threatened to take legal action in the future if deemed necessary. There was no mention of the forfeiture of gratuity in her termination letter, nor was there any mention of any financial damages caused by her actions.
Regards,
Ronie S
From India, Gurgaon
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Regards,
Ronie S
From India, Gurgaon
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From what you have written, it is seen that your friend did not have an opportunity to defend herself. After all, if the employee had transferred company data to her account, some cyber trail would have been seen. Not giving your friend a chance to refute the charge shows a lack of natural justice, which is bad in law (as can be inferred from what you write). Take legal advice and complain to the Labour officer of the area about the denial of gratuity. It appears that the company's action of denying gratuity is unjust.
From India, Pune
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From India, Pune
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Hi Ronie S,
Thank you, Dinesh and NATHRAO, for your replies. My friend used to work in India only. She was served a show-cause notice on her Last Working Day (LWD) after business hours. As far as her performance is concerned, she received a good performance appraisal and had been a top performer throughout her time in the organization. Initially, she requested an early release through an email, but the HR team and her Reporting Manager requested her to stay for an additional month, to which she agreed.
Later, when her resignation was accepted, a show-cause notice was issued on the LWD, stating that her resignation was put on hold pending an investigation by the governance team for data leakage. She tried to defend herself through email exchanges with the governance team and HR, but one day she received her termination letter, stating that she was terminated without further notice or compensation, and her resignation acceptance was revoked. An internal inquiry was conducted by the organization among themselves, with no mention of the forfeiture of her gratuity in the termination letter or any financial damage caused to the organization due to her alleged actions. It was also mentioned that the company might pursue legal action in the future if deemed necessary.
When she inquired about her gratuity claim, HR informed her that she was not eligible, though the word "forfeited" was not explicitly mentioned.
Regards,
Ronie S
From India, Gurgaon
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Thank you, Dinesh and NATHRAO, for your replies. My friend used to work in India only. She was served a show-cause notice on her Last Working Day (LWD) after business hours. As far as her performance is concerned, she received a good performance appraisal and had been a top performer throughout her time in the organization. Initially, she requested an early release through an email, but the HR team and her Reporting Manager requested her to stay for an additional month, to which she agreed.
Later, when her resignation was accepted, a show-cause notice was issued on the LWD, stating that her resignation was put on hold pending an investigation by the governance team for data leakage. She tried to defend herself through email exchanges with the governance team and HR, but one day she received her termination letter, stating that she was terminated without further notice or compensation, and her resignation acceptance was revoked. An internal inquiry was conducted by the organization among themselves, with no mention of the forfeiture of her gratuity in the termination letter or any financial damage caused to the organization due to her alleged actions. It was also mentioned that the company might pursue legal action in the future if deemed necessary.
When she inquired about her gratuity claim, HR informed her that she was not eligible, though the word "forfeited" was not explicitly mentioned.
Regards,
Ronie S
From India, Gurgaon
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Dear Ronie,
This is in addition to what Mr. Nathrao has said in his second post. That your friend's company did not conduct a proper inquiry is a different matter. However, for sending the salary slips to one's personal email ID, I doubt whether your company terminated your friend. There is something more than meets the eye.
Assuming that your friend compromised the cybersecurity, even then, the company should have conducted a proper domestic inquiry. What is the designation of your friend? How many persons reported to her, directly and indirectly? We need this information to check whether the provisions of the Industrial Disputes Act, 1947, can be applied in this case.
As suggested by Mr. Nathrao, your friend may approach the Labour Officer (LO) of her area. However, LO involves provided provisions of the ID Act, 1947 become applicable. Occasionally, they do involve even for higher designations also. However, it depends on the psychology and mood of the LO.
Thanks,
Dinesh Divekar
From India, Bangalore
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This is in addition to what Mr. Nathrao has said in his second post. That your friend's company did not conduct a proper inquiry is a different matter. However, for sending the salary slips to one's personal email ID, I doubt whether your company terminated your friend. There is something more than meets the eye.
Assuming that your friend compromised the cybersecurity, even then, the company should have conducted a proper domestic inquiry. What is the designation of your friend? How many persons reported to her, directly and indirectly? We need this information to check whether the provisions of the Industrial Disputes Act, 1947, can be applied in this case.
As suggested by Mr. Nathrao, your friend may approach the Labour Officer (LO) of her area. However, LO involves provided provisions of the ID Act, 1947 become applicable. Occasionally, they do involve even for higher designations also. However, it depends on the psychology and mood of the LO.
Thanks,
Dinesh Divekar
From India, Bangalore
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Thank you, Dinesh and Nathrao. She used to head a profit center office of an MNC and had 12 direct reports. She claims that she had only transferred her salary slips to her personal email ID. However, from what I could see in her termination letter, she has been alleged of sharing confidential customer data outside the official domain. When she spoke to HR regarding not being given an opportunity to speak to the governance team, she was told that in such cases, as per their company rule, the governance team doesn't speak or discuss. They had made the decision on their own without involving her in any discussion, except for demanding clarification and sending a show cause notice through email.
From India, Gurgaon
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From India, Gurgaon
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Thank you very much, Dineshji.
She used to head a profit center office of an MNC and had 12 direct reports. She claims that she had only transferred her salary slips to her personal email id. However, based on what I could see in her termination letter, she has been accused of sharing confidential customer data outside the official domain.
When she spoke to HR about not being given an opportunity to address the governance team, she was informed that according to their company rules, the governance team does not engage in discussions in such cases. The decision was made independently without involving her in any discussion, except for requesting clarification and sending a show-cause notice via email.
From India, Gurgaon
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She used to head a profit center office of an MNC and had 12 direct reports. She claims that she had only transferred her salary slips to her personal email id. However, based on what I could see in her termination letter, she has been accused of sharing confidential customer data outside the official domain.
When she spoke to HR about not being given an opportunity to address the governance team, she was informed that according to their company rules, the governance team does not engage in discussions in such cases. The decision was made independently without involving her in any discussion, except for requesting clarification and sending a show-cause notice via email.
From India, Gurgaon
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Dear Ronie,
I would like to state the following:
a) Unless the company has material evidence of the breach of security, they will never take this drastic step of termination. The process of termination could be unlawful; nevertheless, they must have some incontrovertible or irrefutable evidence. The company may terminate an employee even without conducting a domestic inquiry. However, if the employee approaches the court, then it becomes the company's responsibility to justify the termination without conducting a domestic inquiry. In your friend's case, the circumstances were not compelling to give short shrift to a process of law. However, this is a different matter altogether.
b) Your friend might have withheld some information from you. We do not know whether she has shared with you the entire information.
c) Whether your friend has breached security or not, she may send the lawyer's notice for her illegal termination. If the company does not relent or even respond, then she may file a suit for illegal termination. However, this will be a civil suit, and civil suits drag on for years together. Therefore, it could be a decade-long legal battle. Is she prepared for that?
d) Breaches of security during notice periods are common. Therefore, those who are under the notice period are kept under special surveillance. After spending nine years in the organization, how come your friend did not know this?
e) Did the company issue her "Relieving-cum-Experience Letter"? If yes, then what remarks have they put for "Reasons for Separation"? If there are negative remarks, then perforce she has to approach the lawyer. However, if the experience letter is neutral, then she might forego gratuity and move on.
Thanks,
Dinesh Divekar
From India, Bangalore
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I would like to state the following:
a) Unless the company has material evidence of the breach of security, they will never take this drastic step of termination. The process of termination could be unlawful; nevertheless, they must have some incontrovertible or irrefutable evidence. The company may terminate an employee even without conducting a domestic inquiry. However, if the employee approaches the court, then it becomes the company's responsibility to justify the termination without conducting a domestic inquiry. In your friend's case, the circumstances were not compelling to give short shrift to a process of law. However, this is a different matter altogether.
b) Your friend might have withheld some information from you. We do not know whether she has shared with you the entire information.
c) Whether your friend has breached security or not, she may send the lawyer's notice for her illegal termination. If the company does not relent or even respond, then she may file a suit for illegal termination. However, this will be a civil suit, and civil suits drag on for years together. Therefore, it could be a decade-long legal battle. Is she prepared for that?
d) Breaches of security during notice periods are common. Therefore, those who are under the notice period are kept under special surveillance. After spending nine years in the organization, how come your friend did not know this?
e) Did the company issue her "Relieving-cum-Experience Letter"? If yes, then what remarks have they put for "Reasons for Separation"? If there are negative remarks, then perforce she has to approach the lawyer. However, if the experience letter is neutral, then she might forego gratuity and move on.
Thanks,
Dinesh Divekar
From India, Bangalore
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